When an employment relationship comes to an end, it is not unusual for the employer and the employee to negotiate and enter into a separation agreement to put in writing the employee’s benefits, entitlements and post-employment obligations. It may be within the leaving employee’s expectation that most of the payments under the termination agreement (such as accrued salary, payment in lieu of notice and annual leave pay) would be subject to salaries tax, but is this really the case for all compensation/benefits received from the employer after termination of employment? READ MORE
Lowe's shelling out $100M in coronavirus bonuses to hourly workers
Lowe's Companies Inc. announced Thursday that it would be doling out an additional round of bonuses to support employees "with unforeseen expenses and hardships" during the COVID-19 pandemic. READ MORE
Kodak’s top exec sees $200 million windfall on stock frenzy
The net worth of Kodak’s top executive has skyrocketed on the company’s transformation from an ailing camera maker to cutting-edge pharmaceutical start-up — thanks in part to some timely share purchases. READ MORE
ISS Publishes COVID-19 Case Study Focused on Executive Compensation Adjustments
The challenges presented to management and corporate boards from COVID-19 are significant. Among other considerations, companies might adjust 2020 performance goals, delay compensation decisions or change the mix of equity awards by making more full-value grants. In recent months, proxy advisors Institutional Shareholder Services (“ISS”) and Glass Lewis have published guidance with respect to these and other governance issues (summarized here and here). READ MORE
The importance of wage and hour audits
With so much uncertainty surrounding the COVID-19 pandemic, one step that business owners can take to regain control of their circumstances is to conduct an annual wage and hour audit of their practices and policies. As a business owner, you should be asking yourself these 10 questions at least once every year: READ MORE
Compensation and Governance Restrictions on CARES Act Stimulus Recipients
We provide a deeper dive into the key stimulus programs under the CARES Act, as summarized in our client note “Congress Passes Largest Ever Economic Stimulus Package: Key Provisions of CARES Act.” The following table summarizes selected compensation and governance restrictions on recipients of assistance through key stimulus programs under the CARES Act. READ MORE
10 Keys to Excise Tax on Executive Compensation Paid by Tax-Exempt Organizations
Proposed Regulations under Section 4960 of the Internal Revenue Code provide important guidance for tax-exempt organizations and their affiliates regarding an excise tax on certain executive compensation. The U.S. Department of the Treasury (“Treasury”) and Internal Revenue Service (the “IRS”) are accepting comments until August 10, 2020. (Throughout this post, “Sections” refer to sections of the Internal Revenue Code.) READ MORE
Can You Actually Become a Millionaire on an Average Salary?
For a long time, becoming a millionaire has been synonymous with becoming wealthy. While $1 million doesn't go nearly as far as it used to, it's still a generous sum that can help set you up for a secure retirement. But saving so much money may seem like a pipe dream for many, especially for the millions of Americans looking at a bank account with little spare cash. READ MORE
SKILL-BASED PAY 2.0 & TECH
The very definition of a “job” is evolving rapidly in many organizations today — and not just in technology fields. “Work” today is more dynamic and unpredictable than ever. According to research on workforce reskilling by the World Economic Forum, one in four adults reported a mismatch between the skills they possess and the skills they need for their current job, with the shelf life of those professional skills being just five years. READ MORE
The New Stimulus Is The Right Time For Streaming Wages
The Senate confirmed this week that as part of the HEALS Act’s new round of stimulus payments, individuals will be eligible for up to $1,200 each. These payments will be distributed alongside the second round of the Paycheck Protection Program to support workers dealing with economic stress. READ MORE
With Public and Private Firms Competing for Talent, Have Executive Pay Packages Changed?
CEO compensation is vastly different at public and private companies — from the total amount of pay to the way it’s structured. As both types of organizations increasingly compete for talent, understanding these differences is important to attract and retain executives. READ MORE
GOP proposal for $200 unemployment aid would mean benefit cut for 30M workers
Senate Republicans unveiled a $1 trillion coronavirus stimulus proposal on Monday that included, among other measures, cutting the extra weekly unemployment from $600 to $200 — meaning that 30 million Americans could see a significant reduction in jobless aid. READ MORE
Blue-collar jobs are hotter than ever, yet entrepreneur asks why many make more money by staying at home
Now that at least some coronavirus reentry is a reality in many parts of the country, blue-collar entrepreneurs like me face the challenge of hiring back our workforces to return to some semblance of normalcy and get this economy rolling again. But there’s an obstacle that wasn’t there before and that the federal government is to blame for: the now missing incentive to go back to work. READ MORE
National $15 minimum wage kills jobs, economy
Beginning July 5, Target stores will raise their starting wage from $13 per hour to $15 per hour. That may be good for the big-box retailer and its employees. However, the COVID-19 pandemic is a good time to suspend the well-intentioned but misguided drive to impose a $15-per-hour minimum wage on businesses nationally. READ MORE
Aligning Sales Compensation With Bottoms-Up Sales Motions in a Covid-19 World
As the Covid-19 pandemic started to take hold in the U.S. in March, we found a silver lining—in the cloud. READ MORE
The Evolution of CEO Compensation in Venture Capital Backed Startups
Venture capital (VC)-backed firms play a disproportionately important role in the econ-omy in terms of innovation, job creation, and productivity growth (Kortum and Lerner2000; Puri and Zarutskie 2012). However, despite the importance of VC-backed firms andthe wealth of information about VC contracts (Hellmann 1998; Kaplan and Str ̈omberg2003; Ewens, Gorbenko, and Korteweg 2019), we know very little about thecompensationcontracts provided to founder-CEOs in private, venture capital-backed firms. READ MORE
Employees With ESPP Purchases During Stock Market Drop Reaped Big Gains In Rebound
An employee stock purchase plan (ESPP) buys company stock for participants at set intervals, usually every six months. An ESPP can be a very good deal. Employees at companies with ESPP purchases during the stock-market lows of March and April 2020 experienced meaningful gains of over 40% in the market rebound as of mid-June, according to data from a major brokerage firm. READ MORE
3 Key Things Companies Need to Consider About Stock Options Right Now
Stock option compensation strategies are hard for small firms and startups to get right even in the best of times given the myriad of rules that apply. The Covid-19 crisis has made it harder, underlining the importance of smart planning around equity-based pay to avoid unexpected tax outcomes for companies and employees. READ MORE
What is an incentive-based stock option?
An incentive-based stock option, or employee stock option, is a kind of benefit that allows employees to buy shares of the companies they work for at discounted prices known as "exercise" prices. READ MORE
The Incentive Stock Option Tax Trap
From a tax perspective, ISOs are arguably the most complex type of stock option. The purpose of this article is to cover some of the high-level tax considerations for ISOs and highlight the need for income tax projections and income tax planning when it comes to ISOs. READ MORE